As of November 28, 2012, Bluefly, Inc. (the "Company") entered into an
employment agreement with James Gallagher (the "Employment Agreement"), pursuant
to which Mr. Gallagher was appointed as the Company's Chief Financial Officer,
effective as of November 28, 2012. Mr. Gallagher replaces Kara Jenny, who (as
previously disclosed) entered into a Separation Agreement with the Company as of
November 20, 2012 (the "Separation Agreement"), but has continued to serve as
the Company's Chief Financial Officer until Mr. Gallagher's appointment pursuant
to the terms thereof. A copy of the Separation Agreement was filed as an exhibit
to the Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 2012.

Pursuant to the terms of the Employment Agreement, the Company has retained the
services of Mr. Gallagher as the Chief Financial Officer of the Company for a
term continuing through December 31, 2015 and has agreed to pay him a base
salary of $275,000 per year (subject to discretionary annual increases). For
each fiscal year during the term of the Employment Agreement, Mr. Gallagher will
be eligible to earn the following bonuses: (i) a performance bonus targeted at
up to thirty percent (30%) of his then-current base salary, based upon the
achievement of one or more targets to be set for each fiscal year by the
Compensation Committee in its sole discretion, and subject to a pro rata
adjustment for underachievement or overachievement of the targets within limits
determined by the Compensation Committee in its sole discretion; and (ii) such
additional performance bonus for each fiscal year as may be determined by the
Compensation Committee in its sole discretion.

Pursuant to the terms of the Employment Agreement, as of November 30, 2012, Mr.
Gallagher will be issued options to purchase 400,000 shares of the Company's
Common Stock (the "Options") under the Company's 2005 Stock Incentive Plan. The
Options vest with respect to 50,000 shares on the six-month anniversary of the
date of grant, and vest with respect to the remainder of the shares in 42 equal
monthly installments, with the first such installment vesting on the seven month
anniversary of the date of grant. Notwithstanding the foregoing, in the event a
Change of Control (as defined in the Employment Agreement) occurs during the
term of Mr. Gallagher's employment, one half of any unvested stock options that
have not vested as of the date of such Change of Control shall be deemed fully
vested as of such date, and the remaining unvested stock options shall vest on
the earlier of (a) the scheduled vesting date or (b) 12 months from the date of
such Change of Control, subject, in each case, to Mr. Gallagher's continued
employment with the Company as of such date. In addition, in the event that a
Change of Control occurs during the last six months of the term of the
Employment Agreement, the term will automatically be extended to the six month
anniversary of such Change of Control, subject to either party's ability to
terminate the Employment Agreement during such extension pursuant to the terms
thereof.

The Employment Agreement provides that, if Mr. Gallagher is terminated during
the term of the Employment Agreement without cause or constructively terminated,
he shall be entitled to severance payments equal to his then-current base salary
for a period of four months.

The foregoing description of the Employment Agreement is not intended to be
complete and is qualified in its entirety by the complete text of the Employment
Agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by
reference.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

Exhibit No. Description
10.1 Employment Agreement, dated November 28, 2012 by and between Bluefly,
Inc. and James Gallagher.